Brooklyn AC-Delco, Inc. et al v. DAC Vision North America, Inc. et al

Filing 111

MINUTE (In Chambers): ORDER DISMISSING ACTION WITH PREJUDICE by Judge Michael W. Fitzgerald: Plaintiffs have not retained new lawyers by the Court-ordered deadline. Therefore, this Court has no choice but to dismiss this action with prejudice. This a ction is DISMISSED with prejudice. This Order shall constitute notice of entry of judgment pursuant to FRCP 58. Pursuant to Local Rule 58-6, the Court ORDERS the Clerk to treat this Order, and its entry on the docket, as an entry of judgment. The Court further ORDERS the Clerk to send copies of this Order to prior counsel at witkowlaw, a professional corporation, and Brandon J. Witkow, to be provided to Plaintiffs. (Made JS-6. Case Terminated.) (jp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES—GENERAL
Case No. CV-15-5744-MWF (PLAx)
Date: March 8, 2017
Title:
Brooklyn AC-Delco, Inc. et al. -v- DAC International, Inc., et al.
Present: The Honorable MICHAEL W. FITZGERALD, U.S. District Judge
Deputy Clerk:
Rita Sanchez

Court Reporter:
Not Reported

Attorneys Present for Plaintiff:
None Present

Attorneys Present for Defendant:
None Present

Proceedings (In Chambers): ORDER DISMISSING ACTION WITH PREJUDICE
Plaintiffs are corporations or other business organizations. Plaintiffs were
warned by their prior lawyers that Plaintiffs needed to find new lawyers or this action
would be dismissed. After the lawyers successfully obtained leave to withdraw, this
Court provided ample time to Plaintiffs to retain new lawyers and warned Plaintiffs
that failure to do so would result in dismissal. Plaintiffs have not retained new lawyers
by the Court-ordered deadline. Therefore, this Court has no choice but to dismiss this
action with prejudice.
The Court granted Plaintiffs’ prior lawyers’ Motion to Withdraw on January 17,
2017. (Docket No. 106). In that Order the Court warned,
Plaintiffs are ORDERED to file a Notice of Appearance of
new counsel on or before February 7, 2017. Failure to do so
shall be deemed a failure to participate in the action. The
sanction shall be dismissal of the action. A corporation may
not appear pro se or through its officers, but through a lawyer
only. Accordingly, failure to hire substitute counsel will
result in dismissal of the action.
(Id.). Subsequently, Plaintiffs asked for a continuance of the February deadline, which
was granted. (Docket Nos. 108-109). Plaintiffs were given a new deadline of March
7, 2017. That deadline has come and gone without a new appearance being filed.
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV-15-5744-MWF (PLAx)
Date: March 8, 2017
Title:
Brooklyn AC-Delco, Inc. et al. -v- DAC International, Inc., et al.
In the request for a continuance Plaintiffs’ outside counsel in New York, Mikhail
Ratner, stated a local firm had shown interest in taking the case. That firm never filed
a notice of appearance and Plaintiffs have filed nothing else since the February request
for a continuance.
The basic rule is that a corporation must appear in federal court through counsel.
Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201-02
(1993) (only natural persons may proceed in forma pauperis because, inter alia,
organizations need a lawyer in federal court). Plaintiffs’ prior counsel warned
Plaintiffs’ outside counsel in New York that he would be withdrawing as counsel as
early as August 2016. (Docket No. 106 at 1). Nonetheless, Plaintiffs have failed to
acquire new counsel by the court-imposed deadline. Therefore, the action must be
dismissed.
This dismissal can be viewed in various ways. For example, it can be viewed,
under Ninth Circuit case law, as the inevitable result of the requirement for a business
entity to be represented by counsel. See Ringgold Corp. v. Worrall, 880 F. 2d 1138,
1142 (9th Cir. 1989) (upholding dismissal of affirmative claims and grant of default
judgment on counterclaims after attorney withdrew and company failed to retain new
counsel or appear for pretrial conferences); Emp. Painters’ Trust v. Ethan Enters., Inc.,
480 F.3d 993, 1000-01 (9th Cir. 2007) (upholding default judgment after corporation
failed to hire an attorney following withdrawal); Galtieri-Carlson v. Victoria M.
Morton Enters., Inc., No. 2:08–cv–01777 FCD-KJN-PS, 2010 WL 3386473, at *3
(E.D. Cal. 2010) (sanctioning corporate defendants by striking their answer when they
failed to retain alternate counsel after the withdrawal of their original counsel).
This dismissal can be viewed as an appropriate sanction for violation of the
Local Rules of the Central District of California. Local Rule 83-2.2.2 explicitly
requires organizations (including corporations) to appear through counsel. Local Rule
83-2.2.4 explicitly warns that failure to obey the Local Rules on attorney
representation may be a ground for dismissal.

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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV-15-5744-MWF (PLAx)
Date: March 8, 2017
Title:
Brooklyn AC-Delco, Inc. et al. -v- DAC International, Inc., et al.
This dismissal can also be viewed as the appropriate sanction for failure to
prosecute this action. As a general matter, district courts may dismiss actions for
failure of prosecution under Federal Rule of Procedure 41(b). See Link v. Wabash
Railroad Co., 370 U.S. 626, 629–30 (1962) (noting that district court’s authority to
dismiss for lack of prosecution is necessary to prevent undue delays in the disposition
of pending cases and avoid congestion in district court calendars); Ferdik v. Bonzelet,
963 F.2d 1258, 1260 (9th Cir. 1992) (stating that district court may dismiss action for
failure to comply with any order of the court). In determining whether dismissal is
appropriate, the Court must consider five factors: (1) the public’s interest in
expeditious resolution of litigation; (2) the Court’s need to manage its docket; (3) the
risk of prejudice to Defendants; (4) the public policy favoring the disposition of cases
on their merits; and (5) the availability of less drastic sanctions. See In re Eisen, 31
F.3d 1447, 1451 (9th Cir. 1994) (setting forth the governing standard).
The first two factors—the public’s interest in expeditious resolution of litigation
and the Court’s need to manage its docket—weigh in favor of dismissing Plaintiffs’
claims. Plaintiffs have had several months to retain new counsel, and yet failed to do
so even after the Court prior counsel warned them that they could not proceed pro se.
The third factor—prejudice to the opposing parties—also weighs against
Plaintiffs. A rebuttable presumption of prejudice to defendants arises when there is a
failure to prosecute the action diligently. Eisen, 31 F.3d at 1452–53 (“The law
presumes injury from unreasonable delay.”) (citation omitted). That presumption may
be rebutted if the plaintiff proffers an excuse for delay. Id. Plaintiffs have failed to
come forward with any excuses that would justify delaying this action further.
The fourth factor—public policy in favor of deciding cases on their merits—
weighs against dismissal. It is Plaintiffs’ responsibility, however, to move the action
toward resolution at a reasonable pace and to avoid dilatory tactics. See Morris v.
Morgan Stanley Co., 942 F.2d 648, 652 (9th Cir. 1991) (“Although there is indeed a
policy favoring disposition on the merits, it is the responsibility of the moving party to
move towards that disposition at a reasonable pace, and to refrain from dilatory and
evasive tactics.”). Because Plaintiffs have failed to discharge that responsibility, the
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV-15-5744-MWF (PLAx)
Date: March 8, 2017
Title:
Brooklyn AC-Delco, Inc. et al. -v- DAC International, Inc., et al.
public policy favoring resolution of disputes on the merits does not outweigh
Plaintiffs’ failure to prosecute.
The final factor—availability of less drastic sanctions—weighs in favor of
dismissal. The Court has attempted to avoid outright dismissal by providing Plaintiffs
an opportunity to retain new counsel within two months after prior counsels’
withdrawal. Plaintiffs, however, have failed to comply with the OSC and ignored the
Court’s explicit warning that failure to retain counsel would result in dismissal with
prejudice. See also Henderson v. Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986) (“The
district court need not exhaust every sanction short of dismissal before finally
dismissing a case, but must explore possible and meaningful alternatives.”).
Whether viewed as compliance with case law or as sanctioning a violation of
court rules and orders or as a failure to prosecute, this dismissal is an appropriate
exercise of this Court’s authority. Fed. R. Civ. P. 41(b). Rule 41(b) provides that
involuntary dismissals are on the merits, absent exceptions not applicable here. Id.
Accordingly, this action is DISMISSED with prejudice.
This Order shall constitute notice of entry of judgment pursuant to Federal Rule
of Civil Procedure 58. Pursuant to Local Rule 58-6, the Court ORDERS the Clerk to
treat this Order, and its entry on the docket, as an entry of judgment. The Court further
ORDERS the Clerk to send copies of this Order to prior counsel at witkowlaw, a
professional corporation, and Brandon J. Witkow, to be provided to Plaintiffs.
IT IS SO ORDERED.

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CIVIL MINUTES—GENERAL
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